2024’s Start: Stocks Show Strength, Bonds Falter Amid Rising Rates

As we navigate through the initial months of 2024, the stock market has showcased promising gains, contrasting with a lackluster performance in the bond market, which has struggled amidst climbing interest rates.

Ahead of the upcoming earnings season, we spotlight a selection of pivotal interim reports spanning various sectors. These corporate updates have the potential to influence market dynamics and shed light on critical aspects of the global economy.

As we approach the end of the first quarter, large-cap US stocks have demonstrated robust growth, with global equities also participating in the upward trend. However, domestic small caps have faced challenges, reflecting the prevailing narrative of prolonged higher interest rates. Following the recent Federal Reserve meeting and sustained economic expansion, the bond market has recalibrated expectations, with fewer rate cuts priced in compared to the beginning of the year.

At the individual company level, corporate earnings have exhibited resilience. The previous quarter’s earnings surpassed expectations, signaling a recovery in earnings per share (EPS) among S&P 500® firms. With the Q1 earnings season just around the corner, gaining insights from key bellwether indicators and emerging narratives becomes paramount. Interim corporate event data provides a valuable avenue for such insights.

In the current calendar landscape, we find ourselves in an opportune moment as we transition into the second quarter. With nearly three months into the year, executives have gained clarity on emerging trends, while March’s flurry of conferences has helped align expectations across industries.

This week, we turn our attention to four pivotal dates that warrant attention from both macro investors and stockpickers alike before the commencement of the crucial Q1 reporting period.

March 28: Ahead of the new quarter, investors worldwide will receive crucial updates on March vehicle sales. Leading automakers such as Toyota Motor (NYSE: TM), Honda Motor (NYSE: HMC), Subaru (7270.JP), and Mazda (7261.JP) will unveil production and sales figures, offering insights into the dynamic new and used car market.

April 2: All eyes will be on Tesla (NASDAQ: TSLA) as the electric vehicle (EV) company releases its quarterly production and delivery statistics. This report could trigger market volatility, given Tesla’s significance and recent fluctuations in its stock performance.

April 8: Oil and gas giant Shell PLC (LON: SHEL) is set to provide a quarterly update on Q1 sales volumes and profit expectations. Despite a robust rally in crude oil prices, Shell’s stock performance has been muted. Solid quarterly numbers could potentially reverse this trend.